Is Gold powering to $1,000 per oz?

The biggest quarterly fall in Gold 

Growing prospects of the FED raising rates have kept this shiny metal posted below the recently tested $1,200oz mark and expectations of higher borrowing rates in the future has also helped to hold the price of this precious metal down, as it now struggles to compete with yield-bearing assets when rates are on the rise. 

A Fear-Based Asset

Firmer US data supported the biggest 2-day dollar move in recent times as the price of Gold fell to only find stability at around the 1170/80 levels. However, reports from Asia say there is still no stopping demand from price-sensitive customers. 

China's new $16bn Gold Fund

China's initiative to boost Gold trade is firmly embedded into their Economic policies.   The new entitiy may include an exchange traded fund for Gold and aims to raise about $16bn or £10bn in three separate tranches. 

This news could restore some Asian buying strength, struggling to offset the prospect of US rate rises.  China still remains the largest Gold producer and consumer of Gold (according to the World's Gold Council. However, the USA still holds the largest Gold Reserve. 

The Future of the Gold Price

If you ever like to know what the Banks think - Commerzbank expects a significant Gold recovery and pin the move lower down to "uncertainty" over rate rises - they expect Gold to be trading back at around $1,250 by 2016.... And moving forward, Chinese officials expect their activity in Gold trading will result in an extra $2.5 trillion in the next 10 years. 

My View

For the best part of the year I have remained bullish on metals, amidst the forthcoming FED rate raises.... and when shit hits the fan... it really does! I think we will still see a large reversal in the Metal as we continue to rest on a support of uncertainty. However, once clarity is restored.... I eye a move higher to the $1300 region. 

As always guys...... Trade Smarter.

Peace & Love - Anish